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Why Alibaba Group Holding Ltd (BABA) Stock Could Gain 16%

Alibaba Group Holding Ltd (NYSE:BABA) may not be a part of the “FANG” stocks, but there’s a strong case to be made that Chinese e-commerce conglomerate should be.

BABA stock, which has skyrocketed 71% year to date, has punished those who continue to bet against it. Yet even with these strong gains, there are strong catalyst in play that can send BABA shares — currently trading around $150 — even higher.

Wall Street, for instance, has yet to take Alicloud seriously (it accounts for only about 5% of Alibaba’s total revenue), but Alicloud is poised to be a major profit producer. Especially as Alibaba expands the service beyond China.

Combined with the company’s monster growth projections for the fiscal year and next year, BABA stock deserves multiple of expansion of at least five points above 2018 estimates of $5.93 per share, which puts BABA stock at a fair value of $160, calling for 15% upside from current levels.

On Thursday, citing the fact that more small businesses are joining its online community, Alibaba executive chairman Jack Ma issued bullish full-year forecasts, saying he expects revenue to grow by 45% to 48% percent.

“Our revenue this year, we will still have 45% to 48% growth, the money comes from solving problems for others,” Ma said, according to